The ability to conduct financial and commercial transactions online via the World Wide Web has proven to be a great convenience and a boost to economic activity. Since payments to online merchants generally cannot be done with cash or checks, most online merchants accept payments from their customers via payment accounts such as credit or debit card accounts. However, when using such payment accounts in online transactions, there is an associated risk of counterfeit and fraud because such payment account information can be discovered and pirated by unauthorized parties. For example, if a customer uses a financial presentation device such as a credit card or debit card to make a purchase online, the name of the customer, the credit card number and expiration date, and other sensitive information is entered through the online merchant's web page and passed electronically through a communication channel that may be compromised.
One way to prevent the unauthorized third party use of a financial presentation device is to require the use of dynamic verification data each time a transaction takes place. Dynamic verification data is data that is uniquely associated with a specific financial presentation device, wherein the verification data dynamically changes from transaction to transaction. Therefore, even if a third party was able to steal the account information including the verification data used during a transaction, such information would be insufficient for subsequent unauthorized transactions because they would require different verification data.
Commonly assigned U.S. patent application Ser. No. 12/032,095 entitled “DYNAMIC PAYMENT DEVICE CHARACTERISTICS”, which is incorporated by reference herein, describes a system and method in which a credit card is embedded with a display and a processor that is adapted to generate a number shown on the display. This number is dynamically generated for each transaction and can be used as a card verification value (CVV). Accordingly, this dynamically generated CVV can be entered as verification data (e.g., via a keyboard) onto a web page provided by a merchant web site during check out.
However, it has been found that providing a financial presentation device with a processor and display is not cost-effective and requires a significant change in the manufacturing process of financial presentation devices. It would be desirable to find an equally secure, convenient and cost-effective system and method for generating dynamic verification data for financial presentation devices.